He has recommended a Rs 1,50,000 limit within the overall enhanced limit of Rs 3, 00,000. "This will not only help increase life insurance penetration but at the same time galvanize long term investment funds for infrastructure," says Sud.

Currently payment towards pension is a part of 80C and annuities are also taxable. There is no additional incentive for individual investors to put money in the pension segment. "With the average life span of Indians increasing and the absence of social security along with inadequate retirement savings (provided by employers/ government) a separate limit of Rs 1, 00,000 must be created and tax on annuities must be abolished to strengthen pension inflows," adds Sud.

Sud also opines that the Tax Deduction at Source (TDS) threshold on agents' commission should be increased to Rs 50,000. "Since most life insurance agents are now in a low income bracket, increase in limit will result in less administrative burden on tax department while processing refunds. Agents will also have more disposable income," adds Sud.

Among other suggestions, Sud has said that the service tax threshold exemption should be extended to life insurance agents to iron out disparity with other financial products distributors.